>Their ads are the worst of all the big social networks, given how anonymous their base is. So they're forced to innovate, which I think is good for everyone
The oddity is that their user's aren't that anonymous -- in fact, they very directly tell reddit what their interests are. Like a trade magazine, reddit really doesn't have to do any analysis at all to figure out how to map ads to the right target audience.
It confounds me how they haven't managed to do a much better job of targeted advertising -- just showing woodworking tool ads on the woodworking sub would be a dramatic improvement over the current setup.
My quick Google-ing shows that they make about $100M/year on ads. So they do this and it works decently well.
However, ads at other social networks have evolved way past this level of targeting (which is a bad thing, in my opinion, but alas). Social networks like Facebook know so much about not just your likes but the people you're friends with and how much your income is and what stores you've been to and what you do on Instagram and what your age is and what state you're in and... the list goes on.
I think most subreddits are tough to monetize. What do you sell to r/funny or r/politics or r/sanfrancisco? What does r/choosingbeggars want to buy? There's a few obvious ones (diets, hobbies), but I think eeking out $100M from that is already impressive.
Plus, Reddit's audience is way more against ads than Instgram/Facebook/etc.
Reddit knows all the subs you subscribe to though. They don't have to give all users of a sub the same ad, just give everyone ads based off their most valuable interests.
So let's say their annual revenue is 3-4x since ad spend is usually weighted heavily towards Q4. At 300-400M per year and growing that's actually pretty solid.
The oddity is that their user's aren't that anonymous -- in fact, they very directly tell reddit what their interests are. Like a trade magazine, reddit really doesn't have to do any analysis at all to figure out how to map ads to the right target audience.
It confounds me how they haven't managed to do a much better job of targeted advertising -- just showing woodworking tool ads on the woodworking sub would be a dramatic improvement over the current setup.